I hope that is a Apple burned cd. If someone 'gave' you a copy, they might not have gotten everything onto it. I didn't have any problems installing 10.1 onto my systems, even the ones running 10.0.x at the time.
One easy way to do it, is to boot into 9.x, make sure that has been updated to the latest version (at least 9.2.x). Then put the OS X cd in and launch the installer when it comes up. It will reboot you into X (from within 9.x) and walk you through the installation process. I have never had the installation not go smoothly that way. Give it a twirl, or a swirl .